How to Calculate Overtime for Salaried Employees Who Also Receive Commissions [Wage & Hour FAQ]


Reading about a recent lawsuit filed against Groupon, I was reminded that even the most cutting edge businesses may not understand the nuances associated with calculating overtime and find themselves a target for running afoul of wage and hour laws. My colleague and fellow blogger, Bill Pokorny, wrote a helpful blog entry last week on calculating overtime for salaried employees. I thought it might be useful for our readers if a follow-up entry was posted discussing how to calculate overtime for salaried, non-exempt employees who also receive commissions.

The key in calculating overtime is to determine the regular rate of pay. Generally speaking, adding commission payments to the mix does not alter this calculation; you still must divide the employee’s total non-overtime compensation for the week by the total number of hours worked. As Bill points out in his post, things get trickier when a non-exempt employee is paid a salary. Adding a weekly commission payment does not really affect that calculation too much – the commission is simply added to the salary received for the week. Here is a sample calculation using Bill’s prior example (and also assuming my math is correct)...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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